August is normally a lean time for the 24-hour rolling news channels. Not this year. Events, in the Harold Macmillan sense of the word, just kept coming.
We were transfixed by James and Rupert Murdoch’s appearances before the Culture, Media and Sport Committee and the phone-hacking saga that has seismic implications for politicians, the police and media alike. The Arab Spring extended into the summer, where TV images of a government turning on its own people in Syria and the extraordinary bravery of protesters in both Syria and Libya have appalled and inspired us in equal measure. The European sovereign debt crisis and US’s credit rating downgrade stirred economic fears, compounded by extreme volatility in global stock markets and the threat of another banking crash.
And then came the riots.
Of all these events, it was the riots that prompted the most profound and startling shift in thinking. Peter Oborne, chief political commentator at The Daily Telegraph and formerly well-known for his right of centre views, expressed the following sentiment: “It is not just the feral youth of Tottenham who have forgotten they have duties as well as rights. So have the feral rich of Chelsea and Kensington.”
Meanwhile, in a recent Newsnight interview, Nassim Taleb, author of The Black Swan, said that “the tumour within the banking sector has not been removed”. In his opinion, the upshot of government monetary policy has been to “socialise losses and privatise gain,” the implication being that society as a whole is paying a very high price merely to safeguard bankers’ bonuses.
It is clear that in parts of Britain the social contract is well and truly broken, leading to a disintegration of law and order; a significant minority is now so disengaged that they are prepared to loot and burn their own communities.
However, the UK also has one of the worst records on social mobility, which must surely be a factor in youth alienation. According to the charity Barnardos, 3.9 million children live in poverty in the UK – almost a third of all children.
Finding a cure for the sickness in society to which David Cameron referred is one of the greatest challenges of recent times. Yet while there is no immediate panacea, business could have a critical role in finding a lasting solution.
Long before events of this summer, the venture capitalist, Sir Ronald Cohen, identified the need to “deal with the social consequences of capitalism”. He co- founded Social Finance, a means by which private investors can give money to projects to tackle social deprivation, to be paid only if successful. It is being piloted in four local authorities.
In his article Capitalism for The Long Term, published in the Harvard Business Review, Dominic Barton, global managing director of McKinsey, the consulting firm, says that short-termism threatens the future of Western capitalism. The tyranny of quarterly reporting means that Western business is hamstrung when competing with the Far East, where it is the norm to plan decades rather than months ahead. Barton further stated that business should not rely only on government to fix the big social issues, asserting that corporates have a duty to help shape society’s social policy.
Barton’s thoughts are echoed by the Confederation of British Industry (CBI). Writing in the Financial Times, John Cridland, Director General of the CBI employers’ body, commented that business needs to intervene at primary school level in order to address the UK’s deep seated social problems.
The professional services sector also has an important role to play in shaping social policy; after all, know-how, experience and expertise are what we sell. Invisible exports are a UK success story; our expertise in accountancy, law, management and property consultancy, engineering, insurance and financial services are exported world-wide. These firms comprise some of the brightest minds in the country so who better to help tackle the complex issues that the recent riots have highlighted? Surely the way forward is to work collaboratively with government and local communities to rebalance a society that has become badly out of kilter. It’s in all our interests to do so.
Back in the early nineties a security ring of steel was put in place to protect the City from further terrorist attacks. Yet in the intervening period, it seems another barrier has been created, one which has effectively insulated professional firms behind a wall of wealth and privilege. For the sake of everyone’s future, we need to overcome this barrier and collaborate with government and communities more actively.
Corporate social responsibility (CSR) is an accepted part of business culture - but there is a perception that in many cases, CSR is merely an adjunct of PR. Now is the time to move it up a gear. Put simply, firms need to use CSR activities as a powerful vehicle for social change, placing it at the centre their strategy rather than in the side-lines.
Sometimes it takes a major shock to bring about lasting change. The riots were undoubtedly the wake-up call. Post-silly season, it’s up to those of us with the wherewithal to help fix it.
Corinna Christophorou is an independent professional services consultant.